Shipping costs and discounts play a crucial role in customer decision-making and the overall performance of your commerce solution. An effective shipping discount strategy can help your business:
- Increase Average Order Value (AOV): Research shows that 80% of customers are willing to meet the minimum purchase threshold for free shipping.
- Reduce Cart abandonment: The Baymard Institute found that 55% of customers abandon their carts due to shipping costs. By offering discounted or free shipping, you can help combat cart abandonment.
- Reduce operational load: Research by Dotcom Distribution found that 60% of shoppers will wait for an extra period of time to get free shipping, which can help manage logistics and inventory more efficiently.
By understanding the impact of shipping discounts on customer behavior and commerce performance, you can leverage these strategies to drive growth in your commerce business.
Free above vs. Cart Discounts
Composable Commerce offers two ways to apply shipping discounts:
- Free above: defined at the Shipping Method level, Free above sets a Cart total threshold per Shipping Method, beyond which shipping is free. The Free above approach is a good fit when you have multiple Shipping Methods with different cost structures, since each can carry its own threshold. Free above only works with fixed shipping rates.
- Cart Discounts that target shipping: Cart Discounts can target shipping costs using
CartDiscountShippingCostTarget. Predicates let you target specific Shipping Methods and apply different discount levels based on criteria such as Customer Group, Cart value, or Line Items. This approach works with both fixed and tiered shipping rates.
You should use either the Free above or the Cart Discount option, but not both at the same time. Using both makes it difficult to anticipate and understand how and which discount will be applied.
In the following sections, we will explore different scenarios to demonstrate how to set up and use each of these approaches to apply shipping discounts based on a Cart's total value.
Scenario 1: Offer free shipping based on the total value of the Cart
In this scenario, we will explore how GreenLeaf Furnishings, a leader in eco-friendly home furniture in the US market, plans to offer free shipping on their delivery options.
GreenLeaf Furnishings will offer free standard shipping for Carts exceeding $100. The normal shipping price is $20. At this stage, GreenLeaf Furnishings only wants to support a single shipping method and a single delivery address for the Cart.
Based on those requirements, both shipping discount options can be used to fulfill GreenLeaf Furnishings’ shipping discount strategy. Let’s start by exploring how GreenLeaf Furnishings can set up their shipping discount requirements using the Free above and Cart Discounts methods.
Use Free Above
| Field | Value |
|---|---|
| Shipping method name | Standard Delivery (US) |
| Tax category | Select a Tax Category relevant to your products and regions. |
| Zone | United States (US) |
| Fixed shipping rate | $20 |
| Free above | $100 |
This Shipping Method is now available for Carts with a US delivery address. The shipping cost is calculated based on the customer's selected Shipping Method and the total Cart value:
- If Standard Delivery is selected and the Cart total is below $100, the shipping cost is $20.
- If Standard Delivery is selected and the Cart total is above $100, the shipping cost is $0.
Use Cart Discounts
| Field | Value |
|---|---|
| Cart discount name | Free Standard Shipping Discount |
| Discount type | Percentage off |
| Discount value | 100 |
For the cart conditions, apply the discount to specific carts where all conditions are true:
- Cart Total is equal to or greater than
100.00 USD - Shipping Method Name is
Standard Delivery (US)
id or key instead.